TOTM

What’s Wrong With the Endowment Effect?

Gordon Smith asks the question in response to a 16 part post (with slides and pictures!) from John Carney offering up the explanation that the behavioral economists have overclaimed and that “the Endowment Effect may really be a response to the counterparty risk faced by early humans.”  Larry Ribstein chimes in with support for Carney and a general word of caution about behavioral finance.

Read the full piece here.